Category: Policy Updates

With Medicare Doc Fix, House Republicans Move Left of Obama on Health Reform

StethoscopeThe fallout from yesterday’s House vote to bind our children and grandchildren further into debt servitude to bail out an unreformed Medicare continues.

Before the vote, Chris Jacobs of America Next (Louisiana Governor Bobby Jindal’s think tank) warned that Medicare could not survive reform if the so-called “doc fix” passed. Writing after the unfortunate vote, Jacobs explains that House Republicans have actually moved left of Obama on Medigap reform:

The GOP’s Proposed Budgets’ Effect on Medicare and Medicaid

Today’s appalling vote in favor of a so-called Medicare doc fix that will increase the deficit by $141 billion makes it hard to take the House and Senate budget resolutions seriously. Nevertheless, they have a lot of positive reform in them. Sean Parnell of the Heartland Institute interviewed me for the Heartland Institute’s podcast.

The interview happened a few days ago, before we knew that almost all House Republicans were about to vote to endorse Obamacare’s vision of controlling Medicare by federalizing the practice of medicine. Nevertheless, if the Republicans ever re-gather their bearings. maybe they will move their budget forward.

Hear the entire podcast here.

What VA Scandal?

Senior Man ThinkingIn 2011, economist Paul Krugman attacked Republican lawmakers for wanting to reform the federal agency responsible for delivering health services to our military personnel. Krugman wrote, “Multiple surveys have found the V.H.A. providing better care than most Americans receive,” and said the VA was “a huge policy success story.” Well, he was wrong.

Today, we know the embattled agency needs an overhaul. When news broke last year that numerous veterans had died while awaiting medical treatment, the public was emphatic in its determination to deliver a message of discontentment to the VA. So, despite Krugman’s fanfare for the VA and despite the media ignoring the ongoing issues, a new report by Heartland Institute indicates at least one national veterans’ organization is still paying attention and thinks reform is necessary.

Republicans Plant Their Flags on Health Reform

U.S. Senator Ted Cruz declaring his presidential candidacy at Liberty University (March 23): “Imagine health care reform that keeps government out of the way between you and your doctor and that makes health insurance personal and portable and affordable.”

House Budget Committee’s budget resolution (March 17): “Individuals should be able to own their insurance and have it follow them in and out of jobs throughout their career.”

Senate Budget Committee’s budget resolution (March 18): “By adopting this new budget, Republicans can repeal the President’s health law and the committees of jurisdiction can continue to work on plans to replace it.”

These statements are all good news for reformers.

New Bipartisan Taskforce Seeks to Reform Veterans Health Care

American Heroes IITwo weeks ago a bipartisan group of U.S. Representatives joined prominent members of the veteran’s community to discuss Concerned Veterans for America’s new VA reform proposal, The Veterans Independence Act.

Dubbed the Fixing Veterans Health Care Summit, the event featured accomplished speakers and notable health care experts including: Avik Roy (Taskforce Co-Chair and Senior Fellow at the Manhattan Institute’s Center for Medical Progress), Senator Marco Rubio (Rep-FL), Newt Gingrich (former Speaker of the House) and many others.

At least for the moment, taskforce members are not alone in their desire to overhaul the VA. Bear in mind, there remains public distrust in the VA after last year’s discovery that numerous veterans died while awaiting medical treatment.

Health Wonk Review

The latest Health Wonk Review (“Spring Forward Edition”) curated by Professor Brad Wright is posted at HealthWorks Collective. There are a lot of items about King vs. Burwell, the case against Obamacare’s subsidies to insurers in states that do not have their own exchanges.

Referring to my article, Professor Bradley writes that “Graham…… anticipates that the Court will find for the plaintiffs…..”, which is not quite the impression I wanted to give. I think that the plaintiffs are correct. However, I make no prediction whatsoever as to the Court’s decision.

A Grand Bargain for Intellectual Property in International Trade Deals?

vaccine-shotBloomberg View columnist Caroline Freund has proposed a thoughtful grand bargain for brand-name pharmaceutical firms’ data exclusivity in international trade deals.

Unfortunately, the column confuses two related but different issues: Patent protection and data exclusivity. The former is available to anyone who invents a better mousetrap. It is an important type of intellectual property (IP), and the U.S. leads the world in protecting inventors’ IP.

HSA Update: Assets Up 25 Percent to $24 Billion

Key findings from the 2014 Year-End Devenir HSA Research Report, which reports on Health Savings Accounts:

  • HSA accounts approach 14 million. HSA accounts rose to 13.8 million, holding over $24 billion, a year over year increase of 25% for HSA assets and 29% for accounts for the period of December 31st, 2013 to December 31st, 2014.
  • Health plans drive growth. During 2014, health plans were the leading driver of new account growth, accounting for 35% of new accounts.
  • Continued strong market fuels HSA investment growth. HSA investment assets reached an estimated $3.2 billion in December, up 40% year over year. The average investment account holder has a $12,995 average total balance (deposit and investment account).
  • Investors show solid returns. Investors achieved an average annualized return of 12.5% on their HSA investments over the last 3 years.
  • HSA assets exceed $27 billion January 2015. The 2015 January HSA Supplement Survey found that HSAs grew to over $27 billion in assets by the end of January, 2015.


“Cadillac Tax” Will Hit 38 Percent of Employers in 2018

The “Cadillac tax” is the excise tax on high-value health plans, which goes into effect in 2018. If the value of health benefits exceeds $10,200 for an individual or $27,000 for a family, the excise will be taxed at 40 percent.

A new report from the American Health Policy Institute breaks down the effect on employers. As well as concluding that the Cadillac tax will hit 38 percent of employers in 2018, it estimates that the average employer-based policy will be subject to the tax by 2031.

There is no doubt the Cadillac tax will put an administrative burden on employers, and reduce the attractiveness of employer-based benefits. On the other hand, as the AHPI report notes, the Cadillac tax will cause employers to increase workers’ wages in exchange for reducing health benefits. Indeed, the Congressional Budget Office anticipates that 75 percent of the revenue due to the Cadillac tax will be from income and payroll taxes due to wage increases, and only 25 percent due to the Cadillac tax itself.

Right to Try Laws Now in 5 States

After this month’s elections, the number of states that have “right to try” laws for experimental drugs has hit five. One in ten states: Not bad for an effort run out of one think tank in Arizona.

However, I have seen no evidence that any manufacturer of an experimental drug is taking advantage of these laws to supply medicines to desperately ill patients in these states. This is understandable: Doling out the medicines to needy patients threatens the sanctity of clinical trials and, therefore, FDA approval.

Congress needs to reform the rules governing the FDA to make use of more real-world evidence in approving new medicines. This is statistically challenging and not to be undertaken lightly. Nevertheless, if more states pass “right to try” laws, I expect that Congress will see the necessity of action.